Chrysler Ties Up With U.S. Bank To Expand Leases

September 8, 2010
2010 Chrysler 300C SRT8

2010 Chrysler 300C SRT8

Chrysler has just inked a new partnership with U.S. Bank to expand leasing options.

Starting this month, a new leasing deal will be offered on new Chrysler 300, Chrysler Town & Country, Dodge Charger, Dodge Grand Caravan, Dodge Journey, Dodge Nitro, Jeep Wrangler, and Jeep Liberty models.

While Ally Bank remains Chrysler's preferred lender, Chrysler leases through U.S. Bank will be "at the most competitive rates and residuals available in the market today," according to message from Chrysler to its dealerships.

Ally had previously opened up leasing to higher-risk customers—those with a FICO credit score of 620 to 660, the upper end of subprime—and leasing is now accounting for about five percent of Chrysler sales. Back in 2006, under the former captive finance company Chrysler Financial, about 22 percent of Chrysler sales were leases, according to Automotive News.

General Motors has also been expanding lease availability; back in July it acquired the subprime lender AmeriCredit, which helped allow access to customers who would be shopping for vehicles in the $15,000 to $30,000 range, such as the 2010 Chevrolet Equinox and Malibu.

Automakers like leasing as it generally allows them to move higher-priced vehicles that are more generously equipped. That in turn can serve to help raise resale values (expressed for leases as residual value).

Residual values for both General Motors and Chrysler took a plunge in the months leading up to their 2009 bankruptcies; that's made leases especially difficult to arrange with the attractive monthly payments that brands with strong resale value, like Honda or BMW, are able to routinely offer.

At present, it's apparent that Chrysler wants to help move some of its better-equipped but slower-selling vehicles with the new strategy, though next year, with the introduction of the 2011 Fiat 500, Chrysler will be tapping into a new type of more upscale small-car buyer—such as that of Mini—that leases in larger numbers.

Also today, Chrysler offered expanded Consumer Cash incentives on many Dodge, Chrysler, Jeep and Ram-branded vehicles, as well as special bonus cash deals and reduced-rate financing through Ally Financial.

[Chrysler; Automotive News]

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